Editorial
Pages

March
2012

'Pay
for results' advertising reclassified as 'secret commissions'

Public
confession: OZmium takes secret commissions!

As
is the case with other businesses, when an online
bookmaker or gambling related business of some sort
wants to advertise, there are two models they can
use. They can either stump up money in advance for
their ad and hope that it repays them in increased
business, a risky assumption when dealing with the
amorphous online entities of todays world, or they
can use the popular and ever growing model of 'affiliate
deals'.

With
this model they pay a commission on either clickthroughs,
turnover, or profits generated from referrals. The
affiliate model makes a lot of sense for them, because
they know that they are not going to pay anything
for a dud campaign that generates no business, and
in the case of commission on profits it enables them
to have a much wider spread of advertising hosts since
there is no cost without a corresponding profit to
offset it. Affiliate deals also give the host company
or individual an incentive to make the promotion successful.
The host is likely to know more about what kind of
exposure is most appropriate on their website and
will go the extra distance to try and get a return
for the advertiser and therefore themselves.

Enter
Senator Nick Xenophon, who has re-branded affiliate
deals as 'secret commissions' and for some reason
singled out Sportsbet Australia, despite most of the
online bookmakers and casinos, not to mention thousands
of non gambling related businesses, using the affiliate
model. He labeled it 'unconscionable' that gamblers
referred to online gaming establishments were not
told that clicking on an ad for a bookie and then
opening an account could result in a commission for
the business hosting the ad.

What?
Is he assuming that all online gamblers are idiots?
Isn't it fairly obvious to most people that if someone
is hosting an advertisment that they are probably
getting paid? It's not like the ads are subtle, or
pretending to be anything other than promotional.
What's the difference whether they are paid up front,
per acquisition, or by commission on business transacted?
Why is Xenophon only banging the drum about online
gaming and not any other industry that pays commissions
for results, such as real estate, car sales, or indeed
sales of almost anything? If you buy a TV from an
electronics store, or a bed from a furniture store,
the sales person is quite likely getting a commission.
Apparently not a 'secret commission'... that only
applies to gambling, presumably because gambling is
sinful and some gamblers get addicted.

In
my opinion Senator Xenophon is confusing widely used
commission payments with 'cash for comment' type conflicts
of interest. There is a clear principle that if you
pay for unbiased professional advice, such as from
a financial advisor, or listen to a radio personality
who appears to be voicing a personal opinion and doesn't
appear to be advertising anything, then commissions
in fairness should be disclosed. Maybe you could even
mount an argument that this should be extended to
every commercial product that is advertised on the
planet, but it would become as irritating as a law
demanding that everyone had to publicly acknowledge
it every time they fart. What galls me is that Senator
Xenophon singled out online gaming, and one particular
company, for his emotive term 'secret commissions'.
It's hard to see it as anything other than political
grandstanding, an idealogical attack on a soft target
for political consumption.

Anyway,
for the record, if you click on any of the big fat
banners advertising bookmakers or other gambling related
businesses on OZmium sites that look and smell like
ads, and then you do business with the company they
advertise, OZmium may receive a commission by way
of payment for promoting that company. No, we don't
work 7 days a week to run this business as a charity
and no, we don't promote other businesses out of sheer
admiration for their contribution to society. Don't
die of shock.